Online gaming company 888 Holdings has signalled 2012 could be its annus
mirabilis as it surprised investors with improved forecasts for the year.

The group, which analysts believed was close to “crisis point” in 2011, said earnings for the first six months will likely “significantly exceed current expectations” as its revamped casino and poker products gain traction with online gamers.

Margins over the next six months are expected to take a knock from the Olympics, which is likely to draw punters towards sports betting.

Investments in the Spanish market, where online gaming has just been legalised, and in the US will also result in a slightly weaker performance in the second half compared to the “strong” start to the year, 888 said.

Even so, the company believes earnings before interest, taxes, depreciation, and amortization(ebitda) for the full-year will be “materially ahead of expectations”.

Last year 888 saw pre-tax profits slump 44pc to $5.85m (£3.8m) as chief executive Brian Mattingley steered the company away from unprofitable contracts in its business to business arm, to focus on consumer products.

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The group also swallowed a $20.7m write-off of Mytopia, a social games development business that fell flat.

Simon French, an analyst at Panmure Gordon , upgraded his full-year ebitda forecast for 888 by 22pc to $56.1m off the back of the announcement.

888 is hoping to reduce its reliance on the UK gaming market, which accounts for 46pc of revenue, ahead of the introduction of a 15pc online gaming tax in the UK, expected in 2013,

It has formed a partnership with US giant Caesars Interactive Entertainment through its business to business arm but it also hoping to strike a deal to launch consumer products across the Atlantic if and when the market opens up.